Charoen Pokphand Foods Public : Annual Report 2021 (Form 56-1 One Report)

Charoen Pokphand Foods Public Company Limited

Annual Report 2021

(56-1 One Report)

PUT OUR HERT INTO FOOD

Table of Contents

Page
Part 1	Business Operation and Performance
1. Business Overview	1
2. Risk Management	36
3. Driving Business towards Sustainability	52
4. Management Discussion and Analysis	79
5. General Information	88
Part 2	Corporate Governance
6. Corporate Governance Policy	91
7. Corporate Governance Structure and Key Information Related to	103
Directors, Sub-Committees, Executives, Employees and Others
8. Major Implementations of Corporate Governance	114
9. Internal Control System and Related Party Transactions	124
Part 3

Report of the Board of Directors' Responsibility on the Financial Statements and Financial Statements

Attachments shown on the website

Attachment 1 Details of Directors, Executives, Company Secretary and Bookkeeper

Attachment 2 Directors of Subsidiaries

Attachment 3 Details of Head of Internal Audit and Head of Compliance Attachment 4 Report of Sub-Committees

Attachment 5 Corporate Governance and Sustainable Development Policy and CPF Code of Conduct Attachment 6 Charters of Sub-Committees

Definition : "The Company" mentioned in Part 1-2 refers to Charoen Pokphand Foods Plc. ("CPF") and its subsidiaries (companies which CPF has direct and indirect control)

In case this Annual Report (Form 56-1 One Report) references information disclosed on the Company's website, the disclosed information shall be deemed to be part of Annual Report (Form 56-1 One Report). The Board of Directors certifies the correctness and completeness of disclosed information and annual information disclosure in this Annual Report (Form 56-1 One Report).

Message from Executives

Chareon Pokphand Foods Public Company Limited and subsidiary operates fully integrated agro-industrial and food businesses, harnessing its investments and partnerships in 17 countries around the world, and beaconed by the vision of being "the Kitchen of the World". The Company aims to achieve food security through its continual innovations that deliver top quality products and services as well as new product development that elevates sublime satisfaction of consumers. Concurrently, we strive to maintain the balance of business success and the value delivered to all stakeholders in alignment with The '3-Benefit' principles which aims to create prosperity for the country, local communities as well as the company and its people. Our operation firmly supports the United Nations Sustainable Development Goals (UNSDGs); and ensures compliance with good corporate governance.

The Company prioritizes research and development to further advance in the innovation of nutrition and value addition to deliver products that promote health and wellness. Furthermore, the Company ensures that its distribution channels align with consumer behavior while the resources efficiency is augmented by automation. Digitization is also adopted to the operations to minimize business risks while maximizing the effectiveness. Our people are cared for to ensure their safety and quality of life and synchronously, the Company nurtures mutual growth of farmers, suppliers, and the society at large.

The year 2021 witnessed persisting challenges of businesses around the world due to the prolonged impact of the Covid-19 pandemic which dampened the market's buying power, drove further changes of consumer behavior, and demanded businesses to accelerate innovation and adoption of technology.

Amidst the turbulence, food security is one of the key engines for the world to overcome this crisis. With such acknowledgement, the Company deployed advanced measures to maximize safety of production and operating procedure while protecting our employees and family through provision of vaccines. In addition, coordination was made with the public sector of each country to provide overall care for the public as well.

The Company has extended its care to the society through its contribution to strengthen food security in Thailand as well as other countries. From 2020 to the present, the "CPF's Food from the Heart against Covid-19 Project" and "CP Merging Hearts to Fight against Covid-19 Project" initiatives have been ongoing where the Company has provided food and beverage to medical staff and those in need of assistance. Fresh food and condiments have been supplied to hospitals, field hospitals, vulnerable groups, vaccination centers, Covid-19 examination centers, community isolation centers, and more than 500 bureaus nationwide. Similar activities have been carried out in countries where the Company's footprint are located namely Vietnam,

Cambodia, Lao, the Philippines, Turkey, the United States, and Russia. In 2021, the Company recorded total sales revenue of 512,704 million baht, asset value of 842,681 million baht, tax payment of 8,282 million baht. The Company's performance was impacted by Covid-19 pandemic, which resulted in lower consumption and declined prices of main products in several areas when compared with the year 2020. On the other hand, its operating costs increased from various activities to maximize the hygiene standards at workplaces and to ensure the safety of our employees and products at all facilities. The year 2021 also saw the increase of the cost of raw materials and logistics. Due to the abovementioned factors, the Company ended the year 2021 with the net profit of 13,028 million baht, a decrease when compared with the previous year.

The Board of Directors resolved to propose to the 2021 Annual General Meeting of Shareholders for the approval of 2021 dividend payment at the rate of 0.65 baht per share, comprising the interim dividend of 0.40 baht per share paid on 10 September 2021, and the annual dividend to be paid at 0.25 baht per share.

In 2021, the Company made 2 significant investments as follows.

1.) Entire business transfer of C.P. Retail Holding Company Limited, which held investment in retail business of Lotus's, and whose shares of which were held by the Company at 20%, to Siam Makro Public Company Limited ("Makro"), whereby the Company received settlement in the form of Makro's newly issued ordinary shares. As a result, the Company directly held shares of Makro at 10.21%. Subsequently, the Company participated in public offering of Makro's ordinary shares, which resulted in remaining Marko's share held by the Company at 8.85% upon completion of such placement.

2.) Delisting of C.P. Pokphand Co., Ltd. ("CPP"), a subsidiary whose common shares was held by the Company at 49.74%, from the Hong Kong Stock Exchange. Consequently, the Company directly holds common shares of CPP at 75.00% as of 18 January 2022.

On behalf of the Board of Directors, executives, and employees of CPF Group, we would like to extend our gratitude to all stakeholders for the continuous trust and support. The Company shall continue to drive business growth following our vision of being "the Kitchen of the World" in order to strengthen the food security, based on the foundation of good corporate governance and contribution to the society, community, and environment, as well as to achieve sustainable economic growth.

Mr. Soopakij Chearavanont Chairman

Mr. Prasit Boondoungprasert Chief Executive Officer

Our Purpose

Kitchen of the World

Vision

To deliver top quality products to consumers in every corner of the world.

Mission

The Company operates vertically integrated agro-industrial and food businesses to offer top quality products in terms of nutrition, taste, food safety, and traceability. The Company is determined to build business growth in strategic locations with the focus to maintain world-class, modern production process as well as efficient and ecofriendly consumption of natural resources in order to enhance its competencies and competitive edge on an international level. We take into account the interests of all stakeholders to ensure sustainable growth, while being able to continuously generate appropriate returns to shareholders.

Sustainable Growth

Aiming for Excellent

Building Solid Foundation

Expand integrated agro-industrial and food businessBe a leader in quality and food safetyFocus on people development

Enhance capability to become a global company

Promote innovation and efficiency enhancement

Take responsibilityfor society and environment

Corporate Governance

Three Benefits to Sustainability (for the Country, People and the Company)

Integrity, Honesty and Reciprocity

Speed and QualitySimplificationAdapt to ChangeInnovativeness